Click for Westport Click for Glendinning Click for Perko Click for JetForums Click for Delta

Living on a "megayacht"

Discussion in 'General Yachting Discussion' started by Blue Ghost, Jun 3, 2015.

You need to be registered and signed in to view this content.
  1. olderboater

    olderboater Senior Member

    Joined:
    Sep 2, 2013
    Messages:
    7,130
    Location:
    Fort Lauderdale
    I meant to indicate he lived there and not lives and also should have said "estate taxes." I also know where Micky lives. I fully understand the tax situation of Carnival. If I was CEO of the corporation I'd have the same responsibility to shareholders. I pointed them out as a company that works within the laws and very clear laws as I did also with the father. All that was pointed out not in a critical way but they were following the statement: "Then there are those situations that are very clear, not the way I personally think they should be, but companies have to take advantage." And I followed it with "But if I was employed in that industry, I'd do the same thing." I was dictating into a phone and clearly got tense wrong again in the last sentence. The fact many were offended when he did that remains true. The fact he complied completely with the law in doing so is also true.

    I do agree that the issue in the case of the cruise industry is not with the cruise line companies but the laws applying to them. I also will point out that if the laws were tightened today, they'd have a simple solution to fly passengers to a new cruise port elsewhere so it would not help the US but would harm Miami and others.

    Carnival was my example of a company that follows the laws that exist, not of one that dances around looking for loopholes and schemes. If I ran the company, I'd do the same. If I had been Ted Arison I probably would have done the same thing he did too. If I had kids I'd be strongly tempted to do similar and my taxes would be nothing compared to his. The Robbie family had to sell the Dolphins and the stadium because it was the only way to pay their estate taxes. Plus Ted Arison was Israeli. Last, he failed to meet the 10 year threshold by 9 months so his estate was still subject to US estate taxes. In his case, that really seems somewhat unfair.

    I apologize for some of the screwed up tenses. I think though if you reread you will see that I used them as an example operating clearly within laws not using means to circumvent them. No criticism of the Arison's as they've followed the laws as written and as most prudent people would do.

    As a corporate executive in my previous life I made choices based on taxes as well. We manufactured in Puerto Rico due to tax advantages. We repatriated funds in the most efficient manner tax wise. Unfortunately, for entirely economic reasons, not tax reasons, we had to manufacture in many other places. You have responsibilities to shareholders and to family. You can't always do things the way you wish as simply those avenues are not possible.
  2. Opcn

    Opcn Senior Member

    Joined:
    Mar 15, 2009
    Messages:
    478
    Location:
    Nordland (near Port Townsend), WA, USA
    We might want to move off of the subject of the financial situations of specific owners here. I think the forum administration frowns on such discussions, and that is probably a wise policy.
  3. karo1776

    karo1776 Senior Member

    Joined:
    Oct 18, 2011
    Messages:
    655
    Location:
    Gone
    Actually yacht ownership and "living on a yacht" are very complex tax issues.
    As Olderboater, HTM09 and I have pointed out much of what is done is due to various government regulations. It gets more complex if you boat outside of on country's territorial waters. It is really three issues tax, liability and asset protection.

    Those three and personal convince are the primary factors why few live on large yachts. The personal convince is a huge factor as someone who can afford the price usually has huge obligations to carry as to his or her time.

    As I said the tax situation is a primary determiner of larger yacht purchase. The variability of tax consequence, as the French example, are determinative. Generally the French have been pretty good on commercial exemptions for yachts. However, other members of the EU have forced some of this to be rolled back.

    Liability is usually the secondary determiner of larger yacht purchase. Large yachts have large potential liabilities and have significant value.

    And, lastly asset protections large yachts are expensive.

    There can be other determiners that might make one want to live on a large yacht such as service and comfort or freedom issues. In my case, I would consider it for myself, but the family would not. I have unique and complex issues primary with ITAR restrictions and Intellectual Property that often I think if I could be in the middle of the ocean and a resident there with no citizenship obligations life would be much easier. Just the IP issues my attorneys say you have the most complex IP situation anyone has ever had to deal with.

    I think why this thread tends to come to the business end of things are those three issues of tax, liability and asset protection. Both Olderboater and HTM09 have worked out good solutions to operating and managing a yacht(s). I really have not come to a practicable solution, and this limits the boat size I can consider.

    The idea that has interested me for some time is based on the fact that in the asset and liability aspects personal ownership is not smart. And, the most logical solution is a British Protectorate from both a maritime, safety rules and regulations and ownership aspect. This is why most large boats are Flagged in British Protectorates. The aspect of the corporate law in effect in all of these (Marshall Islands has adopted British corporate law) is that the corporation owning the boat can isolate the asset protection and liability to it.

    However, the if the boat is primarily personally used this conflicts with the tax regulations as to personal use. It should be a corporate or business venture not a private property as the tax regulations such as VAT, wealth and other miscellaneous tax conflict in a case of private use of a corporate asset. You are mixing the personal and corporate... this is usually the case and hard to avoid. But is fundamentally a no-no from all legal aspects. So living on the thing as a residence would be basically create problems.

    Because of this I have come to the conclusion no large boat should be privately owned or operated. The only solution is to run it as a charter business and charter what you might consider as your own boat (an oxymoron).... it is a corporate asset owned by a corporation that you might control but there can be no private ownership to keep clear.

    I will share the concept I have come to:
    1. British Protectorate Corporation owns and operates the entire yacht... this can be a two tier situation with a holding company and an operating company.
    2. I may or may not directly control this as managing director(s)... likely I would hire that job as to the operating company out with strict contractual limits of what can and cannot be done by the MD.
    3. The Corporation borrows the money for the setup and boat from a third party (which I likely control).
    4. The Operating Corporation operates as a commercial charter company.
    5. If I am going to use to the boat for business or foundation related activity... the boat is chartered and one of those entities pay the bill... including the VAT on the charter (if applicable sometimes is sometimes not... usually is).
    6. If I am going to use the boat for personal use... I charter the boat and pay the VAT and the charter... this is personal after tax money.
    7. The boat would likely be limited in charter business to only those above uses, although, it could do commercial charters like another.
    8. The charter situation is set up by long term contracts with the business uses, foundation uses and personal use. Meaning everyone gets a break for lets say a two year commitment to so many weeks of charter.
    9. The charter operation is designed to fully pay the expenses of the corporation and a small profit... the corporation holds the profit as asset for investment in business development such as bigger boat or payment down of the money borrowed. Remember the corporation owns its stock... no share holders. The corporation situation for the boat would never become debt free... that is an important asset protection... debt. How that is set up is a derivative scheme few here would be interested in or understand.

    This in my opinion is likely the best way. As the primary users do not own anything they are protected. The boat is protected with the corporate and debt structuring. The operating company would make a small profit that likely little or no tax would be due on those profits if done right... who cares. The boat would be a commercial exemption tax wise but the users would be fully paying VAT and income taxes. Clean and in the worst case scenario the liability (i.e. the boat and company) is a package to itself with no possible chain back to me personally. I am simply a charterer!
    Last edited: Jun 21, 2015
  4. olderboater

    olderboater Senior Member

    Joined:
    Sep 2, 2013
    Messages:
    7,130
    Location:
    Fort Lauderdale
    What a convoluted way to have to do things. Glad I live a far simpler life. Now can we please go back to the initial topic. I just reread it and suggest others do the same. I was also a part of going off topic but let's bring it back now.
  5. karo1776

    karo1776 Senior Member

    Joined:
    Oct 18, 2011
    Messages:
    655
    Location:
    Gone
    And, I thought is pretty straight forward and clean!

    Anyway... that set up is likely the best if on is wanting to live on a yacht as residence. Essentially you would be a renter, i.e. charterer. I would have all that 'stuff' figured out and set up before stepping aboard the new residence. And, when the thing sank or had some horrible problem or was taken over or whatever. You move on.
  6. olderboater

    olderboater Senior Member

    Joined:
    Sep 2, 2013
    Messages:
    7,130
    Location:
    Fort Lauderdale
    Simple

    1. Buy boat
    2. Title in FL, Document in US
    3. Insure heavily
    4. Hire US Crew
    5. Go boating
  7. stevejb

    stevejb New Member

    Joined:
    Jul 27, 2014
    Messages:
    3
    Location:
    cape town

    I would most certainly agree with your comments from the stories i hear its clear the owners were getting ripped off although as he is one of the top paid sportsman in his field i suppose it is a drop in the ocean. to him.

    If you know of anyone looking for a couple to look after a yacht please let me know (south African(british passport) qualified ocean yacht master and Italian stewardess STCW 3 languages & and makes a mean cappuccino.
  8. karo1776

    karo1776 Senior Member

    Joined:
    Oct 18, 2011
    Messages:
    655
    Location:
    Gone
    Stevejb... welcome aboard the forum. Only two posts so far. You should mention whether you are looking for a sail or motor boat situation or don't matter... all the best!
  9. stevejb

    stevejb New Member

    Joined:
    Jul 27, 2014
    Messages:
    3
    Location:
    cape town
    tks enjoying some very interesting points of view: anyway sail or motor don't matter.
  10. Blue Ghost

    Blue Ghost Member

    Joined:
    Feb 22, 2012
    Messages:
    299
    Location:
    The Regina systen in the Spinward Marches
    It's funny, when I was growing up the largest "motor yacht" that I had ever seen was the vessel that doubled as the "Emaculata" in "Overboard" with Goldie Hawn and Kurt Russel. I used to flip through Motor Yacht or Motor World or whatever that mag was called, many many years back, and it seemed like even the classic yachts from the 1920s and 1930s had a size limit.

    So when I came to this forum, and saw what I essentially label as mini ocean liners being bought and chartered by some people I used to work for, I was truly astounded.

    I guess my real question in regards to this thread is, well, I mean, even if you were a mid east Oil Potentate with all the money in the world, and had essentially a floating palace, how do you spend time on those things without going crazy? I would think too much of paradise would get to you.

    Don't get me wrong, I hate working retail, and wish I had the finances I used to, but I'm one of those guys who has to post his thoughts, or play online games, or think about world affairs and scientific problems. I'd go nuts trying to live on board one of these things.
  11. K1W1

    K1W1 Senior Member

    Joined:
    Sep 30, 2005
    Messages:
    7,427
    Location:
    My Office
    The Owners of the monsters are not usually on them long term.
  12. olderboater

    olderboater Senior Member

    Joined:
    Sep 2, 2013
    Messages:
    7,130
    Location:
    Fort Lauderdale
    It's many different situations. Some are rarely not entertaining guests, off to another location, and keep quite busy. Others want to retreat into some privacy. Most stay very active and in touch with the rest of the world.

    You're right though that most have too much going on to spend all their time aboard.

    In many ways it's like people who live in hotels. There are quite a few in NYC and some in Vegas, some in Miami, who find that preferable to living in a house or even a condo.
  13. olderboater

    olderboater Senior Member

    Joined:
    Sep 2, 2013
    Messages:
    7,130
    Location:
    Fort Lauderdale
    To some that may be paradise but to many of us it isn't. We're boaters, not those who want to spend time on an ocean going hotel. We don't do cruise ships, but many people love them. And, yes, there are a few people who pretty much do live on cruise ships. At least they're moving from port to port. Mama Lee has lived aboard Crystal Serenity for 7 years. There is even a website, cruiseretirement.com. There is also one cruise ship that is just full time residents with 165 residences on it. For someone who has lost some mobility or some of their ability or desire to take care of a home, appears to be something they enjoy.

    I've read about people who retire to a private island and rarely leave it. Well, at least you see different places on a boat. The article I read on Mama Lee, she'd done 89 cruises with her husband but since he died she's done over 100 including 15 world cruises. She said she's been to almost every country that has a port.
  14. HTMO9

    HTMO9 Senior Member

    Joined:
    Jan 13, 2009
    Messages:
    1,682
    Location:
    Germany
    The two main reasons for those UHNWI owning or chartering a large megayacht are "Splendid Isolation" (at its best) and PERSONAL SAFETY.

    Belonging to this relatively small group of people, you basically have only two choices. Live in public and everybody knows your face and even more dangerous, the faces of your family members (kids) and you have to accept to be always surrounded and protected by bodyguards (sometimes a little army like Mister A).

    Or you have to live a discreet life. By this, you can go shopping on your own without being recognized and travel without a rather big entourage.

    But owning or chartering a megayacht is very helpfull for both types of those "Rich and famous". A large Yacht is the best possible retreat against paparazzis, criminal attacks and kidnapping of family members. And this palace can travel!!

    Btw. A few days ago, the 50 year old son of the German owner of the Oceanco yacht Vibrant Curiosity was kidnapped. Luckily, the man is free again and unharmed. His father, one of the richest German billionairs lives a pretty public life and by this, the kidnapper were able to figure out, where his son used to live. From what I have heard, Vibrant Curiosity will have a much more intensive use by the whole family in the future.
  15. karo1776

    karo1776 Senior Member

    Joined:
    Oct 18, 2011
    Messages:
    655
    Location:
    Gone
    Pourquoi Le Monde Est Sans Amour ?
    Why is the world without love ?

    Well that is an important aspect... personal security. Part of that is the reason for the structure I mentioned. It provides security of anonymity, and importantly when if something bad happens as far as everyone is concerned you are simply a charterer or some manager drone... and if you are unknown so much the better... as is having a droppable passport with a benign nationality.

    Having a mega-yacht in your name is a sure drawing point for all kinds of bad things. One thing I learned in this life ownership of anything is illusionary. You can control something for a period of time and that is all you can expect. Once someone knows you have something the first thing that comes to mind is that you should not have it (envy) and the second is how to get it away from you. If you are successful there are many that will try as best to tear you down. A mega-yacht is a symbol of extreme wealth. I don't know if really that is the reason whether or not to live on it...

    Usually it is as HTM09 says the desire to have one is for get away time and luxury with privacy. Sadly that time is hard to come by particularly for those with extreme wealth.

    That is the problem of 'living as a residence on a mega-yacht, unless you stay at sea and interact little with the rest of the world.
  16. HTMO9

    HTMO9 Senior Member

    Joined:
    Jan 13, 2009
    Messages:
    1,682
    Location:
    Germany
    Unless the megayacht is a state or royal yacht with diplomatic exterritorial status and immunity, the yacht and its owner and guests are still under the jurisdiction of its flag state and its hosting nation(s), where the yacht is located and under the governing international maritime laws and regulations (IMO, SOLAS, MARPOL, ILO).

    Hiding the ownership of a large yacht for personal security and to preserve one's anonymity is widely accepted by most European tax and custom authorities. But hiding your ownership for denying responsibilities and liabilities should not be tolerated.

    The two basic and mostly unsuccessful "tricks" in avoiding taxes are:

    Pretending the yacht is only privately owned and privately used but secretly chartered away. That is plain and simple tax evasion and if caught, pretty expensive and depending on country, can get you into jail easily. This type of "tax avoidance" is very common in the Med. One of my more distant relatives once tried to talk us into this type of operation with his boat. We gave him the choice of forgetting this type of operation or leaving our management setup.

    If you want your boat to make money, start a commercial setup as an official and legal charter business with all its consequences.

    The other and much worse method (from the tax authority point of view) is pretending your boat is a commercial charter boat (regardless of being a crewed charter or bare boat charter) but in reality, you and your family are the only charter guests. Because this method is not only avoiding taxes, it makes the tax payer paying for your boat by tricks like loss allocation and refunding of VAT for example. This type of operation is in the meantype concidered by most European countries, a serious felony.

    One very prominent example in Europe we had, was the former Formula One team leader Flavio B. with his big (and ugly) yacht Force Blue. He got caught by the Italian Authorities doing so, his yacht was chained and from what the drums are telling, getting out of this trouble, was very costly for him.

    One more "trick" of serveral yacht owners is the way of hiding its ownership and denying any responsibility and liability for the boat and its crew, is the official ownership through an offshore trust company and only beneficial usership by the real owner. A very complicated and in my eyes unethicall matter and it needs a lot of criminal energy to do this successfully over prolonged time.

    I have to admit, this "procedure" was invented and developed by commercial ship operators. The most perverted version (in my opinion) is the single ship offshore trust company. If one of those operated ships (mostly very low insured) has an accident with a lot of third party damage (oil spill f.e.), the company is decleared bankrupt and closed, the crew fired and nobody recieves a dime besides the scrap value of this ship. And it makes the honest ship owner and operator look like an idiot, as far as profit margins are concened.

    But anyway or better nevertheless, the legal and ethically tenable way of doing things in business and in your private life is the easiest way and the best way.

    And having (owning) a boat, a yacht or even a megayacht is one of the best experiences or goal, a man can have in his life :D. Especially if one is able to bring his ideas and dreams into the design, layout and appointments of this "floating device". Men were born to go to sea!!!

    Just my 2 (Euro) cents.
  17. karo1776

    karo1776 Senior Member

    Joined:
    Oct 18, 2011
    Messages:
    655
    Location:
    Gone
    Finally the thread is getting interesting. I was absolutely legally correct in my posts. And, what HTM09 absolutely backs up what I have said over several posts.

    I.
    Essentially the way of operating with totally private ownership that is tolerated is a straw man owner (that is a USA legal term) or substitute owner. What that is a someone who stands in for the real owner as owner. This is a common practice in financial markets and legal... FYI. The straw man is contracted to the owner but the straw man holds actual title. The contract determines the limits of the relationship... much like in the situation I describe with the operating instructions limiting a Managing Director. The boat is personally owned by the straw man and all VAT is paid including that on boat purchase or construction that is a one time event over the boat's life or if in France the house (usually on a new house) perhaps that is why new housing construction is low. The VAT on the expenses of operation are paid on all the fuel, all the supplies, all the operations taxable expenses. And, the crew must fully comply with the flagged country and home country employment rules and taxation. Berthing as home port is more expensive in Monaco than next door in Cap D'Ail because the social taxation and obligations under law is higher for the crew. However, straw man essentially legally has all rights and liabilities of ownership. So you have protection with some risks unless you trust a the straw man who is usually an attorney... just the most honest of all souls on earth... oh I got stories on that too... a very dear friend was taken on some oil leases he held.

    If not commercially run but privately used then VAT on the expense of operation are paid on all fuel, all the supplies, all the operating that are taxable expenses.... BUT then the issue of VAT paid status comes up and overstay your welcome you owe VAT on the value of the boat. This is complex to handle as the boat may leave the EU for a few months but still have that time accumulate towards the 18 months... even if you are visiting with a US Flagged vessel and run afoul of the rules. So one simply must pay VAT on the boat if one regularly operates in the EU... no matter the flag... same in the USA but the rate is lower. But many cheat these rules.

    II.
    The another way of operating is as my offshore company setup is described.
    Whether the offshore ownership or charter route is taken the following apply. If the yacht is imported to the EU (i.e. remains too long or appears to remain too long or comes back too soon it adds up to the 18 months) then VAT is due unless commercial ownership and operation is proven... VAT on the boat is not due on commercial operation (usually if truly commercial). The problem is often even legitimate charter/commerical operations do not generate enough revenue or charters to be really legally operate under the laws. This draws the attention of the tax authorities as a scheme to cheat taxes particularly if the VAT pass along scheme... to pass VAT to the non-existant charterers the yacht. But this means keeping track of the VAT due on fuel, supplies etc, etc is challenging.

    This is more challenging if some charterers are businesses using the boat for business, and some are private parties... legitimate charter/commercial use. It is like in the USA a sales tax audit.

    However, if one person/family were solely using the yacht then it appears to authorities he is trying to cheat taxes by the commercial operation i.e. charter scheme (no comment whether he is paying personal income tax) this is usually the VAT on expenses is not handled correctly... or if the yacht stays too long in the EU and VAT on the yacht is not paid.

    But if it is commercially registered the problem is the commercial rules are different than private ownership. For a non commercial owner and user to register as commercial is more limiting and costly if he follows the laws... but has benefit of the safety aspect... I think this is the way to go. In that case issue beyond the commercial safety and operation rules then is VAT again... do you pay for everything upfront the VAT and pay the VAT on the boat itself.... or do you pass it on... and pay the VAT on the charter rate and all the expenses in paying for the charter? AND, importantly should the boat be VAT paid status?

    Well its complicated for a private party running the boat as a commercial operation. There are six ways:
    A. Pay no VAT at all... totally illegal
    B. Pay no VAT on the boat... but pay all the expenses VAT... illegal see my story below.
    C. Pay VAT on the charter (passing through the expenses) and no VAT on the boat... illegal as it is not really a commercial operation so VAT is due on the boat as the operation is really not a commercial operation.
    D. Pay VAT on the boat and pay VAT on the expenses as due as occurring... legal but can be illegal in a minor way as it is not really a commercial operation. But if records are completely kept it will work.
    E. Pay VAT on the boat and pay VAT on the charter (passing through the expenses)... legal but the charter must be a market rate... and all use must be chartered.
    F. Pay VAT on the boat and pay VAT on the expenses as due as occurring and pay VAT on the charter... legal but costly... but will likely draw some suspicion you are dumb or doing something????.
    In any case to be truly commercial the boat must be available to public charter, i.e. advertised and marketed in a serious manner. That is a rub sometimes for a private owner.

    The problem comes up when as I pointed out there are several entities chartering the boat that are essentially one person or family, i.e. business use, foundation use and private use charters. Well that gets complicated if the authorities think it is scheme. So good record keeping is in order. Keeping commercial registry is more restrictive in construction, operations, manning requirements and safety regulations than private ownership... but in my opinion good from the standpoint all those things are really safety related.

    Long time ago I tried this for awhile... bought a boat... as most do and thought I was legal... followed the brokers advice... but it was not VAT paid on the boat... dumb. I ended up with the authorities coming on board that by luck happened to coincide with the wife, in a rare visit being present, and me not present off on business, this situation resulted in her writing her person check for a large sum to bring the boat into VAT paid status... on the spot... which then I had to pay back to her with interest severally compounded... glad she did not have tomahawk or I would have been scalped! I might add in that case all the VAT was paid on everything but on the original purchase of the boat, and with the home port painted on the stern and that being in France that was the tip off... as I remember 18 months and one week!
    Last edited: Jun 24, 2015
  18. HTMO9

    HTMO9 Senior Member

    Joined:
    Jan 13, 2009
    Messages:
    1,682
    Location:
    Germany
    The big problem or lets say the biggest risk with any kind of "straw man" or trust company setup lies in the word trust. You have to fully trust this person, who gives his name for your "commercial" setup, for your yacht, property or aircraft. He is not only the official owner of your boat, property or plane, he has all rights of ownership in reality.

    And this means, he can assume a mortage or loan on your boat or even sell your yacht without your permission or knowledge and walk away with your money. And depending on the offshore country and in some cases even in the US, you might not be able to sue him for that felony.

    And this has happened before and not only a few times.

    For example: Due to US law, no foreigner is allowed to own an US registered aircraft. So, if a non US citizen wants to buy and own/operate a N registered aircraft (because it has no European certification), he has to buy it via a US based trust company. Thousands of aircraft are flying around all over the world with this trust company ownership and the beneficial user flying the A/C anywhere on this globe. Mostly it works perfect but.....

    We had many cases, were the owner of this US trust company assumed a mortage on this aircraft or even sold it, walked away with the money and the beneficial user had to pay for the aircraft a second time in order to keep it. It happened to a friend of mine with his N registered WW II warbird, he bought in the States and operated in Germany.

    May be, I am a simple mind but honestly, I would not feel comfortable at all with one of those ownership setups.

    And olderboater again, your setup only works with smaller boats below 200 GT (Jones act 1920). Let me ament your list for easy mega yachting.

    1. Buy a US built yacht in the US (unless your real name is Leslie Wexner :))
    2. Title in FL, Document in US (see above)
    3. Insure heavily
    4. Hire US Crew
    5. Go boating
    6. Go to Europe (EU waters) only for less than 182 days per year and only every second year or spare some money for a lot of taxes and fees.
    7. Do not have bigger spare parts or toys shipped to your yacht from the US, while in EU waters, unless you really want to pay VAT and luxury tax in Europe (ask Mr. Allen, he knows).

    Btw. The 182 days do not count for time in harbour, it counts for time of first entering EU waters till leaving EU waters. The last harbour and the country it belongs to, only counts for the percentage of VAT and luxury taxes, you have to pay. And place a lawyer and tax advisor on your crew list, you will need him. The laws and rules (and the philosophy behind them) at the other side of the pond are pretty different.
  19. karo1776

    karo1776 Senior Member

    Joined:
    Oct 18, 2011
    Messages:
    655
    Location:
    Gone
    Actually the US rules and the EU rules are not that different. But the idea of a mega yacht something around 60m and over as a private residence is perhaps over the top. Yes it is possible...

    I could give seminars on trust, straw men and nominees. Everyone thinks that is great for various asset protection schemes... and privacy. I don't. Why is the trustee is really never acting solely on settlor's or the beneficiary's best interest (the one who provides the property to the trust). I don't think it is really possible. The other issue is people have no idea how difficult the situation gets when more than one jurisdiction is involved. Don't event think of making yourself trustee for your trust... or be the settlor and the beneficiary yes it is legal in some jurisdictions but just asking for legal complications. Courts are often known to can reverse self dealing actions, order profits returned, and impose other sanctions. Also the trustee is best located in a jurisdiction that is very remote to operations and hard for Courts to impose sanctions. But that makes it very risky as those jurisdictions might not be as friendly to the beneficary's or settlor's interest as you would think.

    I really like the idea of a commercial operation as it forces the commercial safety, construction, manning etc etc on operations. But it is tricky to handle for a private owner legally. HTM09 has a very rare situation in being already in the commercial world with ships. That is much more complex... yachts commercially are pretty much limited to being charter vacation or business meeting boats. I never heard of a ore-handler or dredger or ocean tug or heavy carrier using yacht application! But the experience in the real commercial world makes one much more able and smart in handling a yacht. My situation has been learn the hard way. Though if I ever had a serious injury or loss of life I think that would be the end of the line of of the yacht as my family would be horrified... and I would be getting up for early mass every gosh darned day for the rest of my life.
    Last edited: Jun 25, 2015
  20. HTMO9

    HTMO9 Senior Member

    Joined:
    Jan 13, 2009
    Messages:
    1,682
    Location:
    Germany
    "I've studied now Philosophy and Jurisprudence, Medicine and even alas Theology. All through and through with ardour keen............":D (Johann Wolfgang von Goethe, Faust I).

    Karo, there are a lot of differences in laws and rules between the (non english) EU part of Europe and the US and this both for the private world (civil laws) and the business world. For an US citizen living in the US under US jurisdiction, the situation is much easier than for an EU citizen living in the EU. The United State are a federal country concisting of more 50 states but the EU is only a Union concisting of 28 individual and independent countries combined (or divided by :)) a common market. But it will get much more complicated for either of those citizens living in the other world and trying to transfer (only) the advantages of his world in to the other.

    But living on a larger (mega) yacht is very well possible and not such a bad idea at all. Actually it was my (our) plan for retirement before my beloved wife passed away in 2013.

    Our plan was to build a larger full displacement motor (or SWATH) yacht and to convert one of my cargo vessels into a shadow boat and use this little "fleet" as a live aboard and floating residence for the next 6 to 10 years for travelling around the seven seas. And to use the building time of the primary yacht for taking the great loop. This ideas died with my beloved wife.

    I could not stop the building of the primary yacht as the ink was dry under the contracts but the shadow boat conversion was cancelled before it started.

    My plan, living on the yacht most of the year, when she would (will) be finished, still exists and my retirement plan although slowed down, is still in progress. Future will see me on the aft deck of my boat somewhere in the Med or in the Caribbean during European winter and being pampered by my crew (hopefully). The circumnavigation will most likely never happen in order to allow my children and grand children to visit me more often and make my boat THE central liaison point of the family.

    But all of this, only the easy and fully legal low risk way with strict separation of business (commercial shipping) and private life. EU flagged, German VAT and all taxes paid and all EU laws and class rules complied with.

    The only "problem" I might run into, is the fact, that this boat which was planned as a world tourer, was designed for being always accompanied by a shadow or support ship. Means, no bigger tenders besides the SOLAS rescue boat and two transfer Ribs, no "toys", no other type of tenders like cars, motorbyces, helicopters or amphibious light aircrafts, limited supply and provision storage capacity and an internal range of only 4.000 NM at app. 12 to 14 Kts. But most limiting, only cabins for owner couple plus 8 guests. Additional cabins for guest were planned on the shadow. So not a real long range explorer on its own.

    Without having a land based residence (property) in the specific country, where the boat will be located most of the year, keeping and maintaining those additional "toys and tenders" is getting more and more difficult and makes one eligable for "governmental robbery" by customs and tax authorities in those countries.

    So, the shadow might come back into the plan, as we have figured out and calculated several times, that a normal sized yacht plus a converted cargo vessel is much more effective and cheaper to operate and maintain than one bigger, can carry everthing and ultra long range yacht.

    You would not believe how cheap it is, to convert a lets say a fairly new 400 ft multi purpose dry cargo vessel with lifting gear into a shadow and support vessel by rebuilding some of the cargo space into additional tankage and remove the complete super structure for a bigger "house" with more accomodations and higher comfort level. As commercial ship operators say: "empty steel is cheap".

    Will say, living on a larger yacht is very well possible and desirable and I will do so, if the "Old Man above us" will give me some more years in good physical and mental :)p) fitness.

    As I keep telling my children, I might be freaky but not dumb (jet) :).

    Enough said